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On January 1, 2010, Paye Company purchased Che Company at a cost that resulted in recognition of goodwill of P2,000,000.
Question 1: During the first quarter of 2010, Paye spent an additional P800,000 on expenditures designed to develop and maintain goodwill by training and hiring new employees. Due to these expenditures, at December 31.2010, Paye estimated that the benefit period of goodwill was indefinite. In its December 31, 2010 statement of financial position, what amount should Paye report as goodwill?
Option A. 1,800,000
Option B. 1,900,000
Option C. 2,000,000
Option D. 2,660,000
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